Hubline to expand aviation coverage to Senai Airport08 Feb 2021, by The Star

KUCHING - Hubline Bhd plans to expand its aviation operations under subsidiary Layang Layang Aerospace Sdn Bhd to Senai International Airport in Johor.

With its main base in Kota Kinabalu, Sabah, Layang Layang Aerospace’s aviation operations currently covers Kuching, Miri and Sibu in Sarawak; Kota Kinabalu; Ipoh, Perak; and Subang in Selangor.

“Our company will continue to seek for opportunities to expand beyond our existing markets in Sabah and Sarawak as we seek to establish a greater presence in West Malaysia.

“Moreover, our company will pursue a ground handling licence from the Malaysian Aviation Commission (Mavcom) to handle aircraft from other companies, regions or countries to complement our existing chartering and training services, ” Hubline said in its newly released 2020 annual report.

Hubline diversified its core business from shipping into aviation with the acquisition of a 51% stake in Layang Layang Aerospace for about RM14.2mil in May 2019.

Established in 1994, Layang Layang Aerospace has grown to become one of the largest general aviation companies in Malaysia, operating a fleet of six units of helicopters and eight units of fixed wing aircraft covering the East Malaysian states.

Last month, Layang Layang Aerospace was awarded a contract worth about RM63.2mil by the Sarawak Health Department to provide flying doctor services, medical evacuation and other ancillary health services.

The 48-month contract is from Jan 1,2021, to Dec 31,2024.

While many businesses have been adversely affected by the movement control order (MCO) imposed by the government to contain the spread of the Covid-19 pandemic, Hubline said the pandemic has allowed its general aviation segment to grow its businesses via increase in charters for essential services.

“The global Covid-19 pandemic has a devastating impact on global air transportation businesses.

“Fortunately, our medical evacuation, flying doctor services and emergency medical services which are considered as essential services to rural, secluded or inaccessible communities continue to operate throughout the MCO period, ” it added.

For the financial year ended Sept 30,2020, the aviation segment contributed RM54.7mil to Hubline’s total group revenue RM135.3mil.

On Layang Layang Flying Academy, which is the only academy in Malaysia approved for training fixed wing and helicopter pilots, Hubline said training for existing students resumed in July 2020 after suspension during the MCO period and new intake of students was re-instated in September.

“We have continued to expand our student base by having three cohorts of students during the financial year under review, ” it added.

In a yearly review of the group’s dry bulk shipping business, Hubline said it had been hit by the pandemic, resulting in lower vessel utilisation and freight rates as countries it served experienced lockdown or other movement restrictions.

Hubline transports mainly coal from Indonesia to Vietnam, palm kernel shells from Indonesia to Thailand, gypsum from Thailand to Indonesia and aggregates from Thailand to Singapore.

“Vessel utilisation was down materially during the year under review due to Covid-19 lockdowns.

“In general, freight rates have been trending downwards for the majority of the year.

“Furthermore, there was added pressure on freight rates due to general difficulties being experienced by South-East Asian economies grappling with market excess issues, border controls and movement restrictions, ” added the company.

However, a good thing about its dry bulk shipping, according to Hubline, is the flexibility in the routes operated by its tugs and barges that could be varied in accordance with market demand as each voyage caters to a single client per shipment.

“As the routing is completely determined by charter demand, we perform shipments to any jetty, port or anchorages area with Asean region limited only by draft restrictions.

“We are able to streamline costs and maximise profitability by optimising our routing and scheduling of shipments which then allow us to achieve high level of fleet utilisation while still successfully gaining and maintaining market share.

“Our flexibility is particularly advantageous given that markets have been driven around ad-hoc changes due to Covid-19 pandemic environment, ” said Hubline.